i Memorandum

CITY OF DALLAS

TO Members of the Economic Development Committee: Ron Natinsky (Chair), Tennell Atkins (Vice-Chair), Dwaine Caraway, Jerry R. Allen, Sheffie Kadane, Mitchell Rasansky, Linda Koop, Steve Salazar

sUwECi Authorize a Development Agreement with Uptown Dallas lnc. for Blackburn Median Improvements - Cityplace Area TIF District; Agenda Item, August 13,2008

On August 13, 2008, the Dallas City Council will consider authorizing a development agreement with Uptown Dallas Inc. for improvements to two medians in Blackburn Street. Currently the two medians spanning from the intersection of Blackburn Street and Noble Avenue to the intersection of Blackburn Street and Cole Avenue have brick centers void of landscaping. Uptown Dallas Inc. has requested $50,000 in TIF funds for the improvement of these medians. The improvement district has landscaped and maintains fourteen medians within the district, including a median in Blackburn Street, located between North Central Expressway and Noble Avenue.

The total cost for the two median improvements is $1 13,000, with $1 03,000 for construction costs and $10,000 for design. Uptown Dallas Inc. is asking for a portion of the construction costs to be repaid by TIF funds, while the remaining project costs will be funded by the improvement district.

On May 29, 2008, the Cityplace Area TIF District Board of Directors reviewed the proposed improvement project and recommended City Council's consideration of a development agreement with Uptown Dallas Inc. and Cityplace Area TIF District's participation in the project.

Schedule of the Proiect

Begin Construction September 2008 Complete Construction January 2009

Fiscal Information

$50,000 - Cityplace Area TIF District Funds andfor Tax lncrement Bonds Funds are requested to be dedicated to the Uptown Dallas Inc. Blackburn Street Median Improvement project; repayment of private investment will derive solely from Cityplace Area TIF District Fund andlor Tax lncrement Bond Funds.

Development Agreement with Uptown Dallas Inc. Cityplace Area TIF District August 1,2008 Page 2 of 2

STAFF

Uptown Dallas Inc. - Blackburn Street Median Improvement Project Design Construction Totals

Karl Stundins, Manager, Area Redevelopment Division Tamara L. Leak, Economic Development Analyst

APPLICANT DEVELOPER

Project Costs

$1 0,000 $1 03,000 $1 13,000

Uptown Dallas Inc. Uptown Dallas Inc.

Tracy Curts Executive Director

TIF Amount Requested

$0 $50,000 $50,000

Tracy Curts Executive Director

Amount Recommended for

Approval $0

$50,000 $50,000

RECOMMENDATION

Staff recommends approval of the subject item. Please contact me if you have any questions.

Ussistant City Manager

C: The Honorable Mayor and Members of the City Council Mary K. Suhm, City Manager Deborah Watkins, City Secretary Tom Perkins, City Attorney Craig Kinton, City Auditor Judge Jay Robinson, Judiciary Ryan S. Evans, First Assistant City Manager David 0. Brown, lnterim Assistant City Manager Ramon Miguez, P.E., Assistant City Manager Jill A. Jordan, P.E., Assistant City Manager Dave Cook, Chief Financial Officer Jeanne Chipperfield, Interim Budget Director, Office of Financial Services Karl Zavitkovsky Director, Off ice of Economic Development Hammond Perot, Assistant Director, Office of Economic Development Vernae Martin, Assistant Director, Office of Economic Development Helena Thompson, Assistant to the City Manager

"Dallas, Together, we do it better."

Memorandum

CITY OF DALLAS

TO Members of the Economic Development Committee: Ron Natinsky (Chair), Tennell Atkins (Vice Chair), Jerry R. Allen, Dwaine Caraway, Sheffie Kadane, Linda Koop, Mitchell Rasansky and Steve Salazar

SUBJECT Authorize a Development Agreement with Bishop Colorado Retail Plaza, L.P. for the Development of a Retail Canter at 1222 N. Bishop Avenue in the Oak Cliff Gateway TIF District - August 13,2008 City Council

On August 13, 2008, the City Council will consider authorizing a development agreement with Bishop Colorado Retail Plaza, L.P., in an amount not to exceed $350,000, payable from future Oak Cliff Gateway TIF funds, in consideration of the development of Bishop Colorado Retail Plaza, a 14,950 square foot retail center located at 1222 N. Bishop Avenue. Bishop Colorado Retail Plaza, L.P., is a Texas limited partnership, acting by and through its general partner, Berlin Interests, a Texas corporation. Ronald P. Berlin is the President of Berlin Interests.

Bishop Colorado Retail Plaza, L.P., plans to construct the Bishop Colorado Retail Plaza on a vacant parcel located at 1222 Bishop Avenue. This parcel is located across Colorado Boulevard from Methodist Medical Center at Bishop Avenue. The retail center will consist of approximately 14,950 square feet of space. The total private investment will be approximately $4,500,000. The cost of related TIF eligible public improvements is approximately $350,000. These improvements include, but are not limited to Design, Engineering, Professional Services, Water, Wastewater and Storm Water Improvements, Paving and Streetscape Improvements.

The $350,000 total amount of TIF funds pledged or dedicated to the Bishop Colorado Retail Plaza project is based on the estimated expenditures to be incurred by, Bishop Colorado Retail Plaza, L.P., on eligible TIF project costs such as public infrastructure improvements including sidewalks, lighting, streetscape, and utility enhancement; plus design, engineering and construction management.

On August 23, 2006, the City Council approved Resolutions No. 06-2281 and 06-2282, which approved a development agreement with Belclaire Realty, LTD for the development of the 1222 N. Bishop property as a small mixed use project. The development was not completed and the authorization for TIF subsidy expired.

The developer will obtain a building permit and begin construction by December 31, 2008.

The developer will use reasonable efforts to obtain a final certificate of acceptance for the retail center and all associated public improvements by December 31, 2009.

The developer will execute and fund an Operating and Maintenance Agreement for all non-standard public improvements by the date of the Certificate of Occupancy for the retail development.

Oak Cliff Gateway TIF District - Bishop Colorado Retail Plaza, L.P., Development Agreement Page 2

In addition to complying with MNVBE Fair Share Effort goal of 25% for the TIF reimbursable improvements, Bishop Colorado Retail Plaza, L.P shall make a good faith effort to comply with the Oak Cliff Gateway TIF District MNVBE Fair Share policies for the private improvement construction with a participation goal in an amount of 10% of total private expenditures.

Schedule of Proiect

Begin construction: December 2008 Complete construction: December 2009

Fiscal Information

Development Agreement - Cost Consideration to the City - $350,000, Oak Cliff Gateway TIF District Finds

Karl Stundins, Manager, Area Redevelopment Division Stan Prichard, Economic Development Analyst

Recommendation

Attachments

Location Map Vertical Rendering Site Plan

The Honorable Mayor and Members of the City Council Mary K. Suhm, City Manager Deborah Watkins, City Secretary Tom Perkins, City Attorney Craig Kinton, City Auditor Judge Jay Robinson, Judiciary Ryan S. Evans, First Assistant City Manager David 0. Brown, Interim Assistant City Manager Ramon Miguez, P.E., Assistant City Manager Jill A. Jordan, P.E., Assistant City Manager Dave Cook, Chief Financial Officer Jeanne Chipperfield, lnterim Budget Director, Office of Financial Services Karl Zavitkovs ky Director, Office of Economic Development Hammond Perot, Assistant Director, Office of Economic Development Vernae Martin, Assistant Director, Office of Economic Development Helena Thompson, Assistant to the City Manager

Dallas - Together, we do it better

Oak Cliff Gateway TIF District - Bishop Colorado Retail Plaza, L.P., Development Agreement Page 3

I Project Location Oak Cl6i Gateway TLF Boundary

Office of E m m c Oevelopment July 2006

C T ' g r W * l t

Dallas - Together, we do it better

Oak Cliff Gateway TIF District - Bishop Colorado Retail Plaza, L.P., Development Agreement Page 4

. ...... A , . .

Dallas - Together, we do it better

Bishop Colorado Retail Plaza 1222 North Bishop Avenue

Dallas, Texas 75208

Basic Assumptions:

Acauisition / Development Size - awes Gost-5 Site Acquisition 1.964 2,185,000 Hard Costs - Excluding Public Improvements 2,022,663 Soft Costs 230,000 Subtdel of PRIVATE AcquIsitlon & Development Cost 4,437,663

Public Improvement Costs 350,000 Toter Acquisiikm 6 Development Cost 4,787,663

EuuiQ

Debt -

TIF Contributron for Public Improvements 350,000 Remaintng Cash Equity Requirement 1,331,299 TOW Equity Contn'bution 9,681,299

Estimated Loan to Cost Ratio Loan Amount Rate Amohtion Monthly Payment

70% 3,106,364

6.75% 25 years

21,462

Occupancy Commencement 7/1/2009 eslimeted

Tenant Size Pmpcted Rent/sf Yr 3-4 Yr 5 6 Yr 7-8 Yr 9-10 Bank 2,660 $ 28.00 $ 29.00 $ 30.00 $ 31.00 $ 32.00

Retail 9,140 $ 22.00 $ 24.00 Tdal Retail 14,950

-talired Value Terminal Cap Rate Cost of Reversion

Tenant Rent Roll 1 Tenant Nsme Address Ratable Pmportiolutc Lcasc Dates ScbcduM Basc Rent Renewal Lusc

or Suite A 4 s . f . Share % &pin End Beginning Monthly Annual Annual per SF Option Type 1 Bank 1 2,660 17.79% July 1,2009 June 30,2019 July 1,2009 S6.206.67 $74,480.00 $28.00 2 5 - y r @ NNN

July 1,201 1 $6,428.33 577,140.00 $29 00 FMV July 1,2013 $6.650.00 $79,800.00 $30.00 July 1,2015 $6,871.67 582,460.00 53 1.00 July 1,2017 $7,093.33 S85,120.00 $32.00

2 Retail 2 - 5 9,140 61.14% July 1,2009 June 30,2014 July 1,2009 $16,756.67 $201,080.00 $22.00 None NNN July 1,2014 June 30,2019 July 1,2014 $18,280.00 $219,360.00 $24.00

3 Restaurant 6 3,150 21.07% July 1,2009 June 30,2019 July 1,2009 $7,087.50 585,050.00 527.00 None NNN July 1,201 1 57,350.00 $88,200.00 $28.00 July 1.2013 $7,612.50 $91,350.00 $29.00 July 1,2015 $7,875.00 S94,500.00 $30.00 July 1,2017 $8,400.00 $ 100,800.00 $32.00

Current Omupled Current Vacant ] ~ u m n t Totals 14,950 lW/p 14,950 0 Current S30,050.83 $360,610.00 $24 12

($0 (st) (sf) r

(avenrge)

Operating Expense Summary 1222 North Bishop Avenue

Dallas, Texas 75208

Increase Annual Expenses by: 3.0% percent each fiscal year ("Ot rnd* htgint Fcs)

Year 1 Year 2 Year 3 Year 4 Year 5 Operating Expenses Ending June 2010 201 1 201 2 201 3 2014

CAM Maintenance Year 1 CAM Charges @ $ 2.50 psf 37,935.63 39,073.69 40,245.90 41,453.28 42,696.88

Total CAM Maintenance 1 37,935.631 39,073.691 40,245.901 41,453.281 42,696.88

Taxes & Insurance Year 1 Property Taxes @ $ 2.25 psf 34,142.06 35,166.32 36,221.31 37,307.95 38,427.19 Year 1 Property Ins @ $ 0.40 psf 6,069.70 6,251.79 6,439.34 6,632.53 6,831.50

Total Taxes & Insurance f 40,211.761 41,418.121 42,660.661 43,940.481 45,258.69

SuMotel Expenses: 78,147.39 80,491.81 82,906.56 85,393.76 87,955.57

Management Fee @ 4% of €GI I 18,853.571 18,954.31 ( 19,307.731 19,414.61 1 19,774.35

Total Expsnses: 97,000.96 99,446.12 102,214.30 104,808.37 107,729.92

1222 North Bishop Avenue Dalias, Texas 75208 Cash Flow Analysis

1 2 3 4 5 Five Year Analysi: F W Y U ~ E ~ ~ Y I ~ Jum JU~, ~ u n J U ~ JUW

2010 201 1 2012 2013 2014 Potentml G r w Revenue

Bas8 Rental Revenue 360,610 360,610 366.420 366.420 372.230 Sdtttduled BBsa Rentai Revenue 360,610 360.61 0 366,420 366.420 372,230

Expense Recaptm Revenue GAM Taxes Insurance Mgmt Fee 18l854 18.954 ?9,308 19.415 19,774

Total Reaptwe Revenue 97,001 99,446 102,214 f04.808 107,730

Tobl Potentii Gross Revenue 457.61 1 460.056 468.634 471,228 479.960 w V a c a n c y 8 ~ L ~ 3% 13.728 13.802 14,059 14,137 14.399

ERedtve G m Revewe 471.339 473,858 482.6Q3 485,365 494,359

m b n a - CAM Taxes Insurance, Mgmt Fee

Total Operatinj~ Ekpenses

iasr AnnualOebtSenrice 257,547 257.547 257.547 257.547 257.547 h CaprtalReserves s0.15 2,243 2,310 2,379 2,450 2,524 epwb Total Costs 259.789 259,857 259,926 259,997 260,071

lifbttu;ll e U h Flow 114,549 114.555 120,663 120.S60 126,568

R e v e m Value at EOY C ~ D Rate Caprtalii V W 7.50% 4,992.156 5,073,054 5,074,091 5,155,051 5,407.51 1

krss Costof RBWM 6.0% 299.529 304,383 304,445 309,303 324,451 h Outstanding Loan Balanca EOY 3,073,817 3,022,175 2,966,937 2,907,853 2,844,655

R.MRion Ptwoed Value 1,818,809 1,746,496 1.8027M) 1,937,895 223%406

Wvnrll Prrdsct Return Vatuep Annual Cerrh on Cash fbam (NO Revemon)

QveraU Prqect Internal Rate of Return (IRR) 30.20% 22.61% 18.59% 17.58% 18.35% " ~V.Lnuen,brssdOnofaPmrah,EquilySJlMarof S1.331.2W

Land & Building Values 1222 North Bishop Avenue

Dallas, Texas 75208

Building Size: 14,950 sq. ft.

Acquisition Cost 2,185,000 Development Cost (Public & Private) 2,602,663 Total Project Cost (Acquisition/Public/Private): 4,787,663

Land Size: acres sq. fi. 1222 North Bishop Avenue 1.9640 85,569

Totals: 1.9640 85,569

Entire Project Cost divided by Total Land Size (sf)

Entire Project Cost divided by Building Size (sf)

Acquisition Cost divided by Total Land Size (sf)

Total DeveIopment Cost dr~rded by Building Size (sf)

Memorandum

CITY OF DALLAS

TO Members of the Economic Development Committee: Ron Natinsky (Chair), Tennell Atkins (Vice Chair), Jerry R. Allen, Dwaine Caraway, Sheffie Kadane, Linda Koop, Mitchell Rasansky and Steve Salazar

S ~ ~ J E C T Authorize extension of the Section 108 and Community Development Block Grant (CDBG) loan agreements for the Texas Theatre Project - August 13, 2008 City Council

On August 13, 2008, the City Council will consider authorizing an amendment to the Section 108 and Community Development Block Grant (CDBG) loan agreements with the Oak Cliff Foundation, Inc. funded by the U.S. Department of Housing and Urban Development, to extend the project completion deadline from December 31, 2006 to September 30, 2009 to complete the renovation of the Texas Theatre project located at 231 West Jefferson Boulevard.

BACKGROUND

The Texas Theatre renovation project is a collaborative venture to renovate the 73 year old 12,000 square-foot Texas Theatre to create an aesthetically pleasing and historically significant facility to meet the needs of local artists and to provide performance art space.

The Oak Cliff Foundation Inc. was awarded $1,600,000 in grants and loans from Neighborhood Renaissance Program funds from the US Department of Housing and Urban Development to the City of Dallas in the amount of $25,000,000. The funds were designated for the renovation of the Texas Theatre and were to be used for land acquisition, site preparation and professional services. The Section 108 contract expired on December 31, 2006. Texas Theatre is an historic landmark where Lee Harvey Oswald was captured after the assassination of President John F. Kennedy.

On December 14, 2005, the City Council authorized amendments to the Neighborhood Renaissance Partnership Program Section 108 contract to extend the deadlines for the completion of renovations to the Texas Theatre funded by Section 108 Loan Guarantee funds from June 30,2005 to December 31, 2006 and to enter into an agreement with the Oak Cliff Foundation Inc. (OCF) to use ED1 funds for additional renovation costs related to the Texas Theatre project by Resolution No. 05-3602.

Authorize extension of Section 108 and Community Development Block Grant (CDBG) loan agreements for Texas Theatre Project Page 2

FISCAL INFORMATION

No cost consideration to the City

COUNCIL DISTRICT

1 - Dr. Elba Garcia

STAFF

Lee McKinney, Assistant Director Francisco Carrillo, Economic Development Analyst

RECOMMENDATION

Staff recommends approval of the subject item.

ave any questions or concerns, please contact me at (21 4) 670-331 4.

C: The Honorable Mayor and Members of the City Council Mary K. Suhm, City Manager Deborah Watkins, City Secretary Tom Perkins, City Attorney Craig Kinton, City Auditor Judge Jay Robinson, Judiciary Ryan S. Evans, First Assistant City Manager David 0. Brown, lnterim Assistant City Manager Ramon Miguez, P.E., Assistant City Manager Jill A. Jordan, P.E., Assistant City Manager Dave Cook, Chief Financial Officer Jeanne Chipperfield, lnterim Budget Director, Office of Financial Services Karl Zavitkovsky Director, Office of Economic Development Hammond Perot, Assistant Director, Office of Economic Development Lee McKinney, Assistant Director, Office of Economic Development Helena Stevens-Thompson, Assistant to the City Manager

Dallas - Together, we do it better